Head of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, Danylo Hetmantsev stated, that the government may return to the question of increasing the value added tax (VAT) if in 2025 state budget expenditures will increase significantly. This issue is related to agreements with the International Monetary Fund (IMF).
“If between the first and second reading of the state budget for 2025 there is a critical increase in expenditures, then we will need to return to the issue of raising VAT. And this is within the framework of the agreement with the IMF.”, – Hetmantsev quoted the words of the Minister of Finance.
He also explained why the government decided to increase the military levy instead of VAT. According to him, both of these taxes bring similar revenues: a 1% increase in the military levy brings about UAH 30 billion, while an increase in VAT could bring UAH 45-46 billion.
Hetmantsev noted that VAT has a disadvantage in the form of a direct impact on inflation, while the military levy, on the contrary, has a positive effect on the economy, reducing consumption.
“Firstly, regarding white or non-white business: all taxes in the country are paid by white business. And VAT is also paid by the person who sells in white. If you import an iPhone from abroad “in black”, then you do not pay VAT. And therefore, the question of which of these taxes is completely white is quite manipulative, because both there and there is a black part. Secondly, VAT has its disadvantages, such as a direct impact on inflation reduces consumption”, – noted the People’s Deputy.
Hetmantsev also noted that he is a supporter of increasing VAT, but admitted that each tax has its advantages and disadvantages.
